Farm bill amendment to limit crop subsidies plowed under in Senate

Health, conservation groups wanted to see funds reallocated

Published 4:00 am, Friday, December 14, 2007

An effort to limit government payments to the largest farms failed in the Senate Thursday, quashing the best chance consumer and environmental groups had to promote healthier diets and better environmental stewardship of the nation's nearly 1 billion acres of farmland in the $288 billion farm bill now steamrolling to passage.

California Sens. Barbara Boxer and Dianne Feinstein, both Democrats, voted to limit payments despite pressure from the state's cotton and rice producers. While the amendment by Sens. Byron Dorgan, D-N.D., and Chuck Grassley, R-Iowa, won a 56-43 majority, Democratic leaders had agreed - at the behest of Southern lawmakers pushing hard to protect unlimited payments for cotton and rice growers - to require a 60-vote supermajority to avoid an embarrassing filibuster from their own party.

"It's my belief that all these programs have to change," Feinstein said. "That this is a different day and age."

Feinstein and Boxer also supported a radical overhaul of farm programs that failed Tuesday.

Environment, public health, overseas development, taxpayer and other groups seeking to change the Depression-era system of farm payments mainly to five crops - cotton, rice, corn, wheat and soybeans - had thrown their weight behind the Dorgan-Grassley amendment, hoping to nick the subsidies and divert the savings to nutrition and farm conservation programs.

The failure was a blow to their effort to overhaul the subsidies, and a testament to the power of entrenched single-issue interests in Congress. The fight is not over yet, however; the effort to preserve about $40 billion in subsidies has run into vexing budget problems, bad publicity and a White House veto threat that will complicate efforts to meld the Senate and House bills next month.

"Democrats have totally caved and refused to allow reform to move forward," said Monica Mills, director of government relations for Bread for the World, an anti-poverty group. The farm bill's increases for food stamps and other nutrition programs will disappear after five years, thanks to budget devices to preserve crop subsidies. "The funding mechanism is a total shell game," Mills said. "This is a sham."

A keystone of the reform movement, much of it centered in the Bay Area, is to encourage locally grown and organic foods from smaller farms as a way to improve diets, expand produce variety, reduce farm chemical pollution and preserve the pastoral landscape that is under intense development pressure throughout California.

Federal subsidies are accelerating farm consolidation across the country - the so-called factory farms that now increasingly dominate U.S. agriculture - Department of Agriculture studies say. The largest payments go to the largest farms, giving them additional financial wherewithal to buy out smaller neighbors.

Large cotton and dairy farms - which also have a federal program - already dominate much of the San Joaquin Valley, while rice is concentrated in the Sacramento Valley. Fruit, nut and vegetable farms - and the organic farmers who also mainly grow these specialty crops - tend to be much smaller, but produce most of California's huge farm output.

That is because fresh produce has a higher value and profit margin than commodity crops such as corn and rice, allowing smaller farmers to earn a good return. Produce growers are driven by the same economies of scale that are making all farms larger, but they don't get the direct crop subsidies that fuel the trend.

Despite subsidies - or perhaps because of them, since they depress world prices by encouraging excess production - cotton acreage is falling sharply in California, down 50 percent in just the last seven years, as California farmers switch to more profitable crops such as almonds. Mississippi Delta farmers, by contrast, tend to keep planting cotton to maintain their 75-year-old subsidies.

Reform groups were furious after the amendment failed despite winning a majority. They lashed out at Democratic leaders, accusing them of killing reform by bypassing regular rules. Southern lawmakers, led by Arkansas Democrat Blanche Lincoln, had threatened to bring down the entire bill if they did not get their way.

Another effort to impose a "means test" that would eliminate payments to farmers earning more than $750,000 in profit a year is also expected to fail.

Rice prices have hit a record high, joining other grains and soybeans, bringing big profits to farmers thanks in part to large federal ethanol subsidies that are boosting food prices across the board. Farm income is up more than 30 percent this year to a record $87 billion, creating what many thought was a golden opportunity this year to trim farm supports.

"Democrats not only kept subsidies flowing unfettered to giant farms," said Ken Cook, president of the Environmental Working Group, which publishes an online list of subsidy recipients. "They also prevented the savings these amendments would have generated from being invested in food stamps, conservation, organic agriculture and other chronically underfunded programs."

Cook said Lincoln's defense of "unlimited, multimillion-dollar subsidies in perpetuity to plantation-scale operations in the South" could have been defeated given the pressure in both parties to pass a farm bill in an election year.

Lincoln argued that limiting payments for rice and cotton growers would lead to a flood of imports from developing countries that lack food safety rules, saying Americans could be poisoned by rice imports from Vietnam and Thailand. Arkansas received $1.62 billion in commodity payments from 2002 to 2005, according to the Environmental Working Group, using federal data. The largest recipient, R.A. Pickens and Son Co., received $4.3 million.

Scurrying to avoid an embarrassing filibuster from their own party that might have blocked the overall farm bill, Democratic leaders agreed to require 60 votes without a filibuster. They delayed the vote to let Democratic presidential campaigners get back to town.

Those candidates - Sens. Hillary Rodham Clinton, Barack Obama, Joseph Biden and Chris Dodd - voted for the limits. Grassley's sponsorship provided them political cover in Iowa. Dorgan and Grassley both hail from heavily subsidized farm states, but they say payment limits could help retain public support for subsidies in the face of publicity about large federal payments going to millionaire landowners in Manhattan and San Francisco.

Anticipating a close vote, Southern lawmakers in both parties marched to the floor en masse Wednesday night to protest the payment limits that would affect rice and cotton growers the most.

"We can't do any more, and asking us to do it is not right," said Sen. Mary Landrieu, D-La. "For Georgia, Alabama, Louisiana and parts of Texas, this is as far as we can go."

Dorgan, whose North Dakota farmers grow mainly wheat and livestock, said 75 percent of the federal crop subsidies go to the largest 10 percent of farms.

"If you want to farm two counties or three counties, you ought to be able to do that," Dorgan said. "I just don't think the federal government should be your banker."